M has asked me to keep the identifying details out, as this came from the private "Realtor Comments" on this Phoenix East Valley listing. We thought we’d bring this one to your attention though:
REALTOR REMARKS: ALL BUYERS MUST BE PRE-QUALIFIED BY XXX HOME LOANS PRIOR TO SUBMITTAL OF PURCHASE OFFER. CONTACT…..
Any of our agents, brokers or attorneys want to weigh in on this one?
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I’m kinda ok with it. I hate realtors but I sure wouldn’t want them driving some goof around who doesn’t qualify. With the nature of the business I’m guessing that this is a loan guy they can trust to give them the straight scoop and not just some ‘prequal certificate’ that’s useless.
I do believe that this is legal.
However, it is that the buyer must be prequalified with their lender, but they can eventually get a loan anywhere.
Obviously, after you have gone through the hassle of getting qualified, you probably won’t keep looking, so that’s the idea.
Lenders will often give the builder incentives (will do FNMA warranting paperwork for free, etc.) if they will agree to make them the “preferred” lender.
Asragov-
I was thinking that anyone that wanted to make a cash offer would be pretty bugged. It’s also possible to demonstrate that you have been prequalified elsewhere in advance. I wouldn’t want to do business with these folks.
Requiring a pre-qualification letter is OK. Although they are really not worth the paper they are written on. Requiring a lender is flat out illegal. I bet if you check back with the MLS it will have been removed by now and this Realtor will have been spanked by the board.
It’s a big red flag not to do business with them. Twist I thought the same thing about being a cash buyer. Talking with a few people at work today it was split 50/50 on wether it was a good idea or not. On the flip side I want to know if the agent is qualified and working in my best interest’s. It would be something I would ask since we are laying it all out.
I saw some Countrywide lender-owned houses listed on the ARMLS with a similar stipulation. It required a Countrywide-run credit check as a “contract requirement,” regardless of who would provided the financing (if any).
Yep, Countrywide, part of that pantheon of ethics in lending, wants to check out the potential buyer’s credentials before he/she can take a house off their books that they previously financed for a 100 grand too much to an unworthy borrower.
If I was actually interested in buying such a house, I would simply ignore the request and provide normal evidence of loan pre-approval and cash reserves. If that was not good enough, I would simply move on.
Russ-
It reminds me of going car shopping years ago. I remember one car dealer refused to tell me the price of the car I was interested in until I filled out a credit application. I had a feeling that they wanted to “reverse engineer” the price of the car, based on my income.
I walked off the lot with the salesman following me, talking a million miles an hour until I actually drove off.
Some people just aren’t worth doing business with.
Yeah Countrywide does that here in Minneapolis too. As has been said, it isn’t a requirement to use the lender but a requirement to have someone at Countrywide check you out. Since the LO I use has an affiliation with Countrywide she can write a pre-approval up as Countrywide anyway.
If you want the house and can make the purchase, it is no problem. A big problem is outer space Realtors on both sides of the fence. There are the listing agents looking for divine intervention on homes that are so overpriced they will never, ever sell. Then there are the buyers agents. I am dumbfounded why anyone would drive buyers around in this incredible heat without knowing their true ability to buy. If you don’t have a real buyer, why are you showing him homes?
Many bank owned properties have this condition feeding leads to affiliated business units and also checking the validity of the buyer.
Once upon a time bank owned properties were poisonous to the lender and they wanted nothing to do with it in the future.
Twist,
No more teasers about buyers needing preapproval by XXX lenders, please. I thought I was going to read about new lending requirements that involved dropping trou for an evaluation by Jenna Jamison, Ron Jeremy or AZ realtor and leather daddy Cole Tucker – to see just how far you will go to get into that house. As if worrying about the adequacy of your credit score wasn’t enough!
I feel so cheap now.
tc-
Perhaps I should have gone with XYZ. There are some really desperate lenders out there at the moment- I don’t want to be giving them any ideas!
since when is insuring yhat a borrower is qualified against any rule or regulation?…a borrower may use any lender he wishes, and a seller may require the borrower be qualified any way the seller is comfortable…it’s called a “term of sale”…considering how many Loan Officers don’t know what they are doing, this is a more than reasonable request..most of this mortgage mess could have been avoided if Loan Officers disclosed PROPERLY to the borrower the exact terms of the loan they were getting…sad to say, most of them don’t even KNOW how to properly disclose..sorry, if someone ASSUMES this means the borrower is required to use that lender…most of these so called “pre-qual” letters are useless anyway..only an underwriter can say if a borrower will get the loan, and then only after a complet loan app,credit report, and verified information..this industry had better wake up..we are all becoming our own worst enemy…
“since when is insuring yhat a borrower is qualified against any rule or regulation? a borrower may use any lender he wishes, and a seller may require the borrower be qualified any way the seller is comfortable its called a term of sale
Regulations aside, it is terribly amusing that esteemed Countrywide proposes to put potential buyers through more stringent than normal contract terms. The products for sale, after all, are houses from bad loans that Countrywide failed to underwite properly in the first place. My point is that they should be grateful to anyone willing to take the deteriorating houses off their hands. Frankly, I deem Countrywide untrustworthy and would act accordingly in keeping my personal information out of its remaining employees’ hands.
Russ-
John and I have been worried about personal information in the hands of ANY of these guys at this point.
The question we keep asking is “What happens to the files and data of borrowers when these companies go bankrupt?” The potential for identity theft is big, and I’m surprised we haven’t seen that story yet.